TMI Blog2017 (4) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... f shows that the amount deposited in Bank account, cannot be the assessee’s own money alleged to be routed through bank account . In view of above, we do not find any error on the part of the Ld. CIT-A to have followed the order of the Tribunal for assessment year 2009-10. The Ld. DR has also contended that apart from the trading addition, the Ld. CIT-A ought to have examined the issue of unexplained investment as this was the first year of bank account which was not the case for AY 2009-10. However, in absence of any ground or any material to support the above contention, we reject the same. - Decided against the revenue. - ITA Nos. 4116, 4117 & 4118/Del/2016 - - - Dated:- 31-3-2017 - SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Sh. N.K. Bansal, Sr.DR For The Respondent : sh. Gautam Jain Piyush Kamal, Advocates ORDER PER O.P. KANT, A.M.: These three appeals by the Revenue are directed against separate orders dated 29/04/2016 of Ld. Commissioner of Income-tax (Appeals)-10, New Delhi (in short the CIT-A ) for assessment year 2008- 09, 2010-11 and 2011-12 respectively. Since the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10 the same has been declined by the assessee. He, therefore, treated the deposits of ₹ 55,59,989/- as unexplained cash credit in terms of section 68 of the Act. On appeal, the Ld. CIT-A following the order of the Tribunal in the case of the assessee for AY 2009-10 in ITA No. 3263/Del/2010 dated 11/01/2016, directed the AO to compute the income of the assessee for the year under consideration at the rate of 5% of the total receipt of ₹ 55,59,989/- which works out to ₹ 2,77,999/- and balance addition of ₹ 52,81,990/- was deleted. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above. 4. The ground No. 1 relates to addition of ₹ 55,59,989/- being cash deposits in the bank account of the assessee, held as unexplained cash credit under section 68 of the Income-tax Act, 1961 (in short the Act ). 5. Before us, the Ld. Senior DR opposed the conclusion of the Ld. CIT-A. He contended that facts of year under consideration are not identical to the facts for AY 2009-10 and, therefore, the Ld. CIT-A could not have mechanically followed the precedent cited by the assessee. He contended that neither the nature nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome was declared under presumptive taxation or otherwise. He further submitted that return of income filed by the assessee was not held as defective in terms of section 139(9) and therefore reference of explanation (f) to section 139 at the stage of appeal before the ITAT is also irrelevant. 7. We have heard the rival submission and perused the relevant material on record. We find that in the case of the assessee for assessment year 2009-10, the Tribunal in ITA No. 3263/Del/2010 has decided the issue of deposits in the bank account maintained with the ICICI bank, holding the deposits as representing sales of the trading activity carried out by the assessee. The relevant findings of the Tribunal are reproduced as under: 6.2 We have considered the rival submissions and perused the material on record. The addition made and disputed in this appeal is of ₹ 97,07,593/- representing the deposits made in the bank account of the appellant under section 68 of the Act. The explanation of the assessee vis-a-vis the said deposits is that the said deposits represented business transactions of the assessee and therefore, such deposits could not be taxed as such under section 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,88,270.00 29 50,000.00 11,570.00 30,785.00 February,2009 7,49,480.00 25 84,640.00 8,000.00 46,320.00 March,2009 11,02,500.00 31 1,00,000.00 1,360.00 50,680.00 Total 97,07,593.00 311 10,15,440.00 86,430.00 5,50,935.00 6.3 From the aforesaid table, it is apparent that there are 311 deposits and the minimum deposit is ₹ 1,360/- in the month of March, 2009 and maximum deposit is of ₹ 2,00,000/- in the month of June, 2008. Further the average deposits range from ₹ 76,000/- in April, 2008, ₹ 26,850/- in May, 2008, ₹ 1,01,400/- in June, 2008, ₹ 54,500/- in July, 2008, ₹ 34,025/- in August, 2008 and likewise in the range of ₹ 26,000/- to 50,000/- in September, 2008 to March, 2009. It is also noticed that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,680.00 Total 55,85,908.00 182 10,09,040.00 1,75,005.00 5,92,022.50 Month Deposits by Cash (Cash Total Deposits No. of Deposits Maximum Deposits Minimum Depiosts Average April, 2008 3,53,640.00 11 49,000.00 13,400.00 31,200.00 May, 2008 2,51,985.00 9 43,800.00 7,550.00 25,675.00 June, 2008 4,08,300.00 12 48,000.00 9,500.00 28,750.00 July, 2008 4,63,750.00 13 49,850.00 9,000.00 29,425.00 August, 2008 2,72,500.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation, further efforts to identify the nature of credits are not possible. It is thus apparent that despite the request of the assessee, vide letter dated 12.12.2011 to make adequate enquiries, the Assessing Officer has not brought out any material to rebut explanation of the assessee. In such circumstances, the explanation tendered by the assessee cannot be rejected arbitrarily as has been held by the Hon ble Jurisdictional High Court in the case of Sona Electric Co. Ltd. vs. CIT 152 ITR 507. It is also a matter of fact that there is no other source of income as the appellant is salaried employee. An affidavit filed by the appellant, statements of the appellant without rebutting the contents thereof cannot be disregarded as has been held by the Hon ble Apex Court in the case of Mehta Parikh Company vs. CIT 30 ITR 181 and Hon ble Madras High Court in the case of CIT v. Krishnaveni Ammal 158 ITR 826. We therefore conclude that deposits represented trading receipts in the business of chemicals carried out by the appellant of Titanimum Dioxide. Accordingly such deposits, could not have been taxed under section 68 of the Act. In arriving at the above conclusion, we also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t fact would overlook other factors which assessee has highlighted before us to establish that the deposits represents trading receipts in the course of business of the appellant and therefore, income has to be computed only by applying the rate of profit on the total number of deposits in the bank account of the appellant. It is also a matter of record and it is also noticed from the bank account that the total cash withdrawals are of ₹ 91,55,450/- whereas out of the total deposit of ₹ 97,07,593/-, there are withdrawals made of ₹ 91,55,450/- and therefore, to suggest that all deposits are income of the appellant would otherwise be an incorrect estimation of income of income of the appellant. 6.7 Further, so far as rate of profit is concerned, it is noticed that the assessee has placed on record a chart showing rate of profit declared by the comparable concerns which are as under: S. No. Name of the party Average rate 1. M/s. Chemical De Enterprises 4.784 2. M/s. Bharat Enterprises 3.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and directed the Assessing Officer to delete the impugned addition. The finding recorded by the Ld. CIT-A in para-4.1 from page 22-27 of the impugned order has not been controverted by the Department by bringing any positive material on record. 9. The Ld. DR has contended before us that facts for assessment year 2009-10 and facts of the instant year are not identical. However after having examined the assessment order, we are unable to accept the above contention. The AO had initiated the proceeding under section 147 of the Act on the basis of the assessment proceeding for assessment year 2009-10. Further while making the addition in the year under consideration, the AO has not recorded any independent findings or observation but has referred to investigation carried out during the assessment proceeding for assessment year 2009-10. Even the Ld. DR has not placed on record any material after having been granted time to support the contention that facts for assessment years 2008-09 and 2009-10 are not identical except the fact that assessee in the return of income filed, declared profit under presumptive scheme of taxation under section 44AF of the Act and the documents as req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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